At what point does the law consider an estate insolvent?

Asked 11 months ago - Ferrum, VA

My mother left all her personal and household property to be divided equally between the heirs. She bequeathed/devised her real property to the four heirs but not equally.. There is not enough assets from the household and personal property (tangible assets) to cover the debts & expenses of the estate. Is the estate insolvent? or is it only insolvent if the executor forces a sale of the real property to cover the debts & expenses from the proceeds?

Attorney answers (1)

  1. Charles Ross Smith III

    Contributor Level 16

    Answered . No doubt of insolvency. You have laid down the definition of an insolvent estate. The executor has no choice in such a situation. They owe a fiduciary duty to the estate to act in a responsible, lawful manner. The executor must sell the estate and distribute the proceeds to the creditors in the correct priority, per statute.

    This is not a simple matter. You will need an attorney. Paying the attorney is not a problem. They are paid out of the estate and they have a priority over most other creditors. Since you are not going to get anything out of the estate, except the executor's fee, an attorney will at least save you time and frustration. And the attorney costs you nothing, really. Good luck.

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